Sustainable Supplies prepares the following aging of receivables analysis:

Days Past Due Total Current 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 57,600 $ 40,000 $ 9,000 $ 3,600 $ 2,000 $ 3,000

Percent uncollectible 1% 3% 5% 8% 11% Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $500 credit.

Multiple Choice

• Debit Bad Debts Expense $840; credit Allowance for Doubtful Accounts $840.

• Debit Allowance for Doubtful Accounts $840; credit Bad Debts Expense $840.

• Debit Bad Debts Expense $1,840; credit Allowance for Doubtful Accounts $1,840.

• Debit Allowance for Doubtful Accounts $1,840; credit Bad Debts Expense $1,840.

• Debit Bad Debts Expense $1,340; credit Allowance for Doubtful Accounts $1,340.